Tata AIG plans to raise equity base to Rs 230 cr

Nimish Shukla, TNNAug 11, 2003, 12.22am IST

AHMEDABAD: Tata AIG Life Insurance is planning to increase its capital base by infusing additional equity of Rs 45 crore by the end of December '03. With this infusion, the equity base of the company would increase from Rs 185 crore to Rs 230 crore.

"In line with our growth plans, we are planning to increase our capital base by adding $10m by the end of December '03," Ian Watts, MD, Tata AIG Life Insurance, told ET.

Mr Watts said that the company, which reported a 236% jump in its premium income of Rs 70.9 crore, against Rs 21 crore last year, is targeting a growth of over 100% this year.

In order to achieve this growth, the company is planning to launch many new products during the year. "Of our new products, we are planning to come out with an equity-linked product in the next six months," Mr Watts said. As part of its investment pattern, the company invests its corpus in secure avenues like government securities, bonds and debentures to meet its various obligations. In order to maximise its return on investment, the company is increasing its equity exposure. "We have invested around 4% of our total funds in equity and are planning to increase our equity exposure up to 7%," Mr Watts said. The company has tied up with over 100 corporate clients to provide group-term life insurance cover, including companies such as Syngenta, JP Morgan and Ernst & Young in addition to the 15,930 employees of Wipro and 18,471 employees of General Electric.

"We will continue to focus on corporate clients during the current year as well," Mr Watts said. The company will continue to increase its geographical reach all across India and expand operations to six more cities. As part of this move, the company opened a branch in Ahmedabad on August 9, '03. The company is also planning to open a branch in Surat. In '02-03, Tata AIG increased its sales force by over 8,000 agents to almost 13,000. "We have decided to increase the strength of the work force by adding 1,000 agents every months," Mr Watts said.

Tata AIG has also tied up with HSBC for its bancassurance products distribution and it is negotiating with three more banks for similar arrangements, he added.